8990 incurs P2B losses from project launch delays in 2016

MASS housing developer 8990 Holdings Inc. has incurred an estimated P2 billion from delays in project launches last year mainly caused by issues on the processing of permits, a company official said.

In an interview on Tuesday, 8990 president and chief executive officer Januario Jesus Atencio told reporters that the company was not able to launch five projects that were intended for last year.

“Actually hindi lang tatlo, nadagdagan pa [not just three, there were others]. Bacolod, Iloilo–the big ones. Because it was an election year. Not that I’m blaming anybody,” Atencio said.

Late last year, Atencio said that the company would not be able to launch three Davao projects that were slated for 2016—Deca Homes Toril, Deca Homes Mulig 1 and Deca Homes San Lorenzo.

With two more delayed projects—Deca Homes Sta. Barba in Iloilo and Deca Homes South of Bacolod in Bacolod—the number of launched projects reached only nine, instead of the 14 intended launches for 2016.
“If we were on schedule, these five new projects would have generated P2 billion,” Atencio said.

Nonetheless, he remains optimistic for the company’s growth this year.

“We’re now hopeful for 2017 because all of these projects that were delayed will now be on stream. So we’re just delayed. The revenue is not lost, it’s just delayed,” Atencio said.

“The 2017 target could be anywhere between P13 to 14 billion, if you follow last year’s growth,” he said, referring to revenue target.

Based on the company’s five-year target, the company expects to grow its revenues by 20 percent every year, leading to P24 billion in revenues in 2020.

Atencio said they are set to introduce five new projects next year, two or three of which will be located in the National Capital Region (NCR). He earlier said they were looking at Ortigas, Cubao and Commonwealth in Quezon City.

P50-M preferred share issueMeanwhile, 8990 chief finance officer Roan Buenaventura-Torregoza said on Tuesday that the company is set to issue to 50 million preferred shares worth P5 billion in July this year.

Last November, 8990 chairman Mariano Martinez told reporters about the company’s plan of issuing up to P10 billion worth of perpetual preferred shares.

“The preferred shares will probably be issued by about June or July. The underwriter is Chinabank Capital. There will be a shelf registration of P10 billion but the initial uptake is just P5 billion,” Martinez told reporters earlier.

Proceeds of the preferred share issue will be used for land bank purchase, working capital and retirement of loans.

In the first nine months of the 2016, 8990 posted net income of P3.19 billion, up slightly from the P3.17 billion recorded in the previous year.